London: Andy Murray's reign as Queen's Club champion ended in stunning fashion on Thursday as Czech veteran Radek Stepanek clinched a shock 7-6 (12/10), 6-2 win over the world number five.

Murray's tame third round exit at the hands of the unheralded world number 42 is a major blow to his grass-court preparations less than two weeks before the start of Wimbledon, where he will defend the title he won so memorably last year.

Britain's Andy Murray's newly-appointed French coach Amelie Mauresmo gestures as she watches Murray play against Czech Republic's Radek Stepanek during their third round match on the fourth day of the ATP Aegon Championships at the Queen's Club in west London, on Thursday. Pic/AFP

It was also the 27-year-old's first loss since his surprise decision to hire Frenchwoman Amelie Mauresmo as his new coach last Sunday.

Since losing to Roger Federer in the 2012 Wimbledon final, Murray had been unstoppable on grass, but his 19-match winning run, which brought him Olympic gold, a first Wimbledon crown and a third Queen's title, came to a shattering halt in most unexpected style in the west London sunshine.

Murray had revealed earlier on Thursday how his attempt to hire Mauresmo began with a nervous overnight wait to see if she would respond to his initial contact in a text message.

But on the evidence of this underwhelming display, their partnership, which has been the talk of the sport for the last week, might not last much longer than an initial trial period during the grass-court campaign.

In fairness to Mauresmo, Murray's malaise has lasted since he beat Novak Djokovic to end Britain's 77-year wait for a male winner of the Wimbledon singles title.

Since then, hampered by back surgery and his split with previous coach Ivan Lendl, Murray has failed to reach a single ATP Tour or Grand Slam final.

The British number one had hoped getting back on grass following his run to the French Open semi-finals would signal a further up-turn in his fortunes.

But this defeat, which saw Murray squander eight set points in the first set, suggests there is much to work on with Mauresmo if he is to repeat last year's Wimbledon heroics.

Murray had breezed past Paul-Henri Mathieu in the opening match of the Mauresmo era on Wednesday and it looked like another stroll was in prospect when he stroked a backhand winner to break in the opening game.

But Murray dropped his own serve in the next game and was under the cosh for the rest of the set.

Even when he built a 6-2 lead in the tie-break, he still wasted a remarkable eight set points before paying the price for his profligacy as Stepanek punched home a volley to take the set.

If Mauresmo was concerned by Murray's lacklustre performance, it was impossible to tell as she was maintaining an admirably expressionless face.

She must have been more than a little baffled by Murray's lethargic reaction to his travails, which took a turn for the worse when he was broken in the first game of the second set.

A Stepanek ace snuffed out Murray's hopes of converting a much-needed break point in the next game.

The luck was against Murray as well and the 35-year-old broke again for a 5-2 lead when his miscued return clipped the net and fell just beyond the Scot's reach.

Murray was unable to mount any kind of response and fittingly his desultory display ended with a tepid backhand slice into the net.

Stepanek's reward for just his second career win over Murray is a quarter-final clash with South African seventh seed Kevin Anderson, who defeated Sergiy Stakhovsky 6-3, 3-6, 7-6 (7/4).

Former Wimbledon runner-up Tomas Berdych has never won the Queen's title, but the big serving Czech has the perfect game for grass and he booked his quarter-final berth with a 7-6 (7/2), 6-4 victory over France's Adrian Mannarino.